Association between payer mix and costs, revenues and profitability: a cross-sectional study of Lebanese hospitals

• Published in: Eastern Mediterranean health journal Vol. 21; no. 6; pp. 381 - 388
• Main Authors: Saleh, S, Ammar, W, Natafgi, N, Mourad, Y, Dimassi, H, Harb, H
• Format: Journal Article
• Language: English
• Published: Egypt World Health Organization 01.06.2015
• Subjects: Beneficiaries; Cross-Sectional Studies; Economics, Hospital - statistics & numerical data; Financial analysis; Financial Management, Hospital - statistics & numerical data; Funding; Health care expenditures; Health services; Hospital Costs; Hospitalization; Humans; Income - statistics & numerical data; Insurance coverage; Insurance, Health - economics; Insurance, Health - statistics & numerical data; Lebanon; Medically Uninsured - statistics & numerical data; Models, Economic; Physicians; Profit margins; Profitability; Utilization review; Lebanon
• ISSN: 1020-3397; 1687-1634
• DOI: 10.26719/2015.21.6.381

This study aimed to examine the association between the payer mix and the financial performance of public and private hospitals in Lebanon. The sample comprised 24 hospitals, representing the variety of hospital characteristics in Lebanon. The distribution of the payer mix revealed that the main sources of revenue were public sources (61.1%), out-of-pocket (18.4%) and private insurance (18.2%). Increases in the percentage of revenue from public sources were associated with lower total costs and revenues, but not profit margins. An inverse association was noted between increased revenue from private insurance and profitability, attributed to increased costs. Increased percentage of out of- pocket payments was associated with lower costs and higher profitability. The study provides evidence that payer mix is associated with hospital costs, revenues and profitability. This should initiate/inform discussions between public and private payers and hospitals about the level of payment and its association with hospital sector financial viability.